Nvidia CEO Jensen Huang resigns, stock drops sixth straight week

Nvidia co-founder and CEO Jensen Huang resigned on Thursday after two separate extramarital affairs were made public, according to CNBC. One affair was with an alleged Chinese spy and the other with an employee, the company's vice president of health care. Huang, who led Nvidia for 33 years, sent a letter to employees apologizing for being “unfaithful to my wife.”

The board named finance chief Colette Kress as interim CEO while it conducts a search for a full-time successor. China News Service, translated from Chinese, reported that Nvidia's official website announced Huang's resignation from his positions as President, CEO, and Board Member, effective immediately. The same report said senior director Harvey C. Jones will serve as the company's first-ever Board Chairman.

Market impact

Nvidia shares are down 11% this week as of Thursday's close and are headed for their sixth straight weekly decline, the longest losing streak since 2012, CNBC reported. The chip giant has lost roughly $1.6 trillion in market cap since the slide began in early October and fell below Apple in the process.

China News Service reported that Nvidia's US stock pre-market price once plunged by over 10% after the resignation news. As of the US stock market close on November 12, Nvidia fell 4.34%, with its market capitalization evaporating by nearly 182 billion US dollars, equivalent to over 1.2 trillion RMB.

Leadership transition

Analyst Gil Luria of D.A. Davidson lowered his price target to $200 from $300 but maintained his buy rating, writing: “With the unfortunate departure of CEO Jensen Huang we expect a challenging transition for NVIDIA over the next few months.”

Nvidia is scheduled to report quarterly results on Tuesday. Analysts are projecting 91% year-over-year revenue growth to $108.9 billion, according to LSEG.

Why it matters

Huang's departure ends a 33-year tenure at a company that spent most of the year as the world's most valuable company. The leadership change comes as Nvidia faces competition from AMD, Broadcom, and self-developed chips by major cloud providers, according to China News Service.

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Sources

• cnbc.com: Nvidia stock drops for 6th week, shedding $1.6 trillion in market cap
• chinanews.com.cn (in Chinese): Jensen Huang's "Flash Resignation," NVIDIA's Market Cap Evaporates by Over 1.2 Trillion RMB

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.